Outward Trade and Investment Mission to Cabo Delgado & Maputo Provinces

During the Outward Trade and Investment Mission to Cabo Delgado & Maputo Provinces of Mozambique  on Mozambique on 25 Nov – 01 Dec 2018, the Steel Tube Export Association of South Africa (STEASA) took part in the trade and investment mission to Mozambique arranged by the dtic and the office of the High Commission in Mozambique.

The main objectives of the mission were to grant the South African government through the dtic the prospect of continued economic collaboration and partnership with Mozambique, increase the formation of commercial partnerships and joint ventures between their businesspeople and for the realisation of higher levels of industrialisation through sustainable trade and investment.

In 2017, 30% of Mozambique’s imports came from South Africa which puts it in the first position in terms of the market share in the country. Total trade volume in 2017 stood at R51 billion and the trade balance between the two countries in 2017 was R 26.6 billion in favour of South Africa. Mozambique is a strategic and important partner to South Africa and is amongst the top five of our trade partners in the Southern African Development Community region.

In 2010, Anadarko made its first discovery in the Offshore Area 1 of the deep-water Rovuma Basin, launching one of the most important natural gas discoveries in the last 20 years. Today, the company and its partners have discovered approximately 75 trillion cubic feet (Tcf) of recoverable natural gas resources in Offshore Area 1 and are working to develop one of the world’s largest liquefied natural gas (LNG) projects. Most companies in Mozambique both local and international are strategically positioning themselves to partake in the downstream supply chain offerings that will be realized during the construction of the onshore and offshore LNG facilities.

Steasa’s objectives on the mission was to engage meaningfully with prospective companies with proven competencies enabling them to bid on subcontracting tenders from the EPCM (McDermot, Chiyoda & Saipem) on the Golfinho- Atum Project. These companies would be in need of tubular related products for which supply could be sourced from SA based steel tube and pipe manufacturers in the upstream, midstream and downstream sectors.

The following was ascertained on the mission regarding the Golfinho- Atum LNG Project:

• Chiyoda, the lead partner in the CCSJV consortium should be awarded the EPCM contract. The other partners are Saipem and McDermott, advised that the majority of the quotations are in and that they anticipate procuring close to $1 billion from South Africa over course of the project’s construction period (54 months commencing soon after FID which will be in Q1 next year).
• It is highly likely that the following work packages will go to South African EPC contractors:
• Marine Works (Jetty and Marine Offloading Facility)
• Security Services
• Permanent Fencing
• Tugs & Barges
• Geotech

Anadarko and Chiyoda advised that due to the sensitivities around local content (in Mozambique) they have to follow a completely transparent procurement process. As such they advised that it is important that would be South African suppliers register on the following website www.mzlng.com as forward work packages will be posted thereon and that the CCJS JV will use this portal extensively.